The cryptocurrency market responded positively to remarks by Jerome Powell, the chairman of the Federal Reserve. The head of the regulator hinted at a potential interest rate cut in September.
At the Jackson Hole conference, Powell pointed to weak labor market data and a slowing economy. He added that tighter immigration policies are negatively impacting employment and economic activity.
In his view, the price increases driven by higher tariffs will have a short-term effect. The Federal Reserve is prepared to respond to any prolonged consequences should they arise.
However, a worsening labor market could negatively affect price stability, necessitating adjustments to monetary policy, Powell emphasized.
Following his speech, the proportion of investors expecting a rate cut jumped to 89% from 69%.
In response, the price of the leading cryptocurrency rose from around $112,400 to over $117,000. The price increased by 3.4% in 24 hours.
Leading altcoins reacted more dynamically than the flagship. Ethereum’s price exceeded $4600, up from ~$4300 before Powell’s speech, marking a 9.4% increase in the last 24 hours.
Dogecoin reached $0.23 (up 7%), Solana rose to $193 (5.3%), and XRP climbed to $3.03 (5%).
The cryptocurrency market capitalization increased by 4.6%, surpassing $4.07 trillion.
Traditional financial instruments also reacted to the Fed chair’s speech with green candles. The S&P 500 index gained nearly 1.6% from the start of the trading session. Gold prices momentarily reached $3378.
Bitcoin began its recovery after falling to around $112,000 even before the Fed chair’s speech.